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- Forget the View--Any Room Will Do
- Brazil's Economic Outlook Improving
- Green is All the Rage
- America's Global Reputation: A Bad Rep or a Bad Rap?
- Ten Global Trends Investors Should Think About
- The Highs and Lows of Transaction Costs in Europe
- Everything You've Always Wanted to Know....
- New Schedule for NAR Annual Conference & Expo
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With a growing number of U.S. companies expanding into the booming UAE market, relocating employees are finding it tough to locate accommodations in the capital city, Abu Dhabi. According to a recent article in Financial Times, annual rent inflation is 20-30%. For 2007, there is a projected supply of 1,100 units, but demand for 21,900 units, according to research from Colliers International and Dubai-based investment bank Shuaa Capital. Similar shortfalls are expected in 2008. To address the problem, the Abu Dhabi Chamber of Commerce plans to invest $140 billion in real estate and construction over the next few years. By 2009, supply should catch up with demand, with units available for rental and purchase to foreigners on a 99-year extendable leasehold basis in selected areas. Abu Dhabi has not yet seen the property frenzy experienced in Dubai, but some estate agents predict this may yet come as planned new construction is completed in 2009. Unlike Dubai, however, Abu Dhabi will not at this time grant a residence visa to investors, although many anticipate that to change. Abu Dhabi's property law allows foreigners to own leasehold properties within certain zones, but some potential buyers are skeptical given ill-defined property title and transfer structures. Read an overview of Abu Dhabi's property law, or download Colliers International's UAE Market Report.
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In spite of what's seen as a chronically slow-growing and underperforming economy (3.7% growth rate in 2006), lower inflation and interest rates may have spurred investment and economic activities in Brazil to the point that the world's 8th largest economy is moving toward lasting stability, following a period where construction of new residential developments was greatly impeded. An article by Jules Marling IV, CRE, FRICS, in The Counselor (pg. 10), published by The Counselors of Real Estate, reports that although standard down payments remain at 50% for new housing with onerous financing terms, falling interest rates are unlocking pent-up demand for condos and Sao Paulo is experiencing a full-fledged boom. When Brazilian president Luiz Inácio Lula da Silva began his second term in January, he promised to put some juice into the economy. Many economists say that to speed growth Brazil needs to reduce its tax rate, shrink the government and eliminate bureaucracy that makes doing business costly. Only time will tell if da Silva's internal initiatives will pay off, but external conditions remain favorable. In April, The Wall Street Journal reported that due to strong Chinese demand for Brazil's agricultural and mineral commodities, and ample liquidity on global capital markets, Brazil's hard-currency reserves hit a record $110 billion, and that the central bank is easing interest rates. Economists are projecting growth this year of 4% to 4.5%. Also, Bloomberg reported in April that Brazil's economy is "robust" and on track to be awarded an investment grade rating from credit rating companies.
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With last month's anniversary of Earth Day (coinciding nicely with spring), everything is turning green, and real estate is no exception. Worldwide, buyers are increasingly looking to buy or build homes that are good for the environment. According to Time Magazine, homes in London account for 44% of the city's carbon emissions. In response builders plan to open the city's first large-scale zero-carbon housing development to be located in London's Docklands. All 200+ homes will hook up to a combined heat and power plant that turns wood chips into electricity and hot water. Solar panels and wind will provide additional power. The project will have organized car and bike clubs to reduce commuting emissions. And the cost? Just 5% higher than a traditional housing development. Read more about how to reduce your "carbon footprint" with Time's Green Guide to an Earth-Friendly Home. Use the "drag" tool to examine options to cut carbon emissions on a room-by-room basis.
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A REALTOR®'s reputation is important. You know the saying..."one unhappy customer will tell 7 people and those 7 people will tell 7 people...," and so forth. A statistic certainty? No, but the point is that a tarnished reputation can be hard to polish up. Two recent polls suggest that a growing number of Americans are concerned about the reputation of the U.S. When Gallup asked Americans how they think the United States rates in the eyes of the world, 72% said either "somewhat unfavorably" (44%) or "very unfavorably (28%). Similar results were found from a survey commissioned by Business for Diplomatic Action (BDA), an organization working to improve the standing of America in the world. BDA found that 76% are concerned about America's global reputation and 74% believe the U.S. is viewed negatively by people in other countries. The up side is that both surveys suggest some optimism. In the Gallup poll, the number who think America's reputation will improve in 10 years is double that of those who think it will worsen. The DBA survey shows that six in ten think it is "more important for Americans to reach out and build new bridges to people from other countries and cultures," as opposed to three in ten who say Americans must "build fences around our country to keep out illegal immigrants, terrorists and foreigners in general." The DBA survey also identifies changes that respondants believe would positively impact the world's negative view of the U.S.-- important perhaps for the future of a global real estate market. Read the DBA press release on survey findings. Want to turn the tables? Gallup also has data on American's view of other countries.
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In recent weeks news of key housing markets in decline may have been unsettling to the vast numbers of people who view real estate as the most stable place to put their money. Good news then from Ernst & Young's global director of real estate, Dale Anne Reiss, who says commercial property markets are powering ahead. Reiss has identified 10 worldwide property trends she believes will create opportunities for investors, ranging from the globalization of real estate investment trusts (REITS) to green buildings to the "café workforce." Read the full list of 10 trends and Reiss' commentary.
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REALTORS® assisting buyers seeking properties in Europe take note of a new study focusing on European property purchases by an out-of-country buyer. The online Global Property Guide provides an extensive analysis of transaction costs for existing properties in Europe, taking into account Registration Costs, Legal Fees, Agent Fees, and Sales & Transfer Tax. (New or renovated properties can carry additional taxes, thus exceeding the rates noted.) Russia tops the list with a transaction cost of 25% of the property value, with Bulgaria as a very close second at 24.9%. Following that is Monaco and Belgium, both at 19.7%, Italy at 17%, and France at 16.3%. Estonia, Slovakia and Lithuania have the lowest costs, ranging from 3.81% to 2.35%. Just ahead of these countries is the UK at 5%. The transaction-cost research is based on input from local real estate agents, government agencies and the World Bank Doing Business Web site. Read the in-depth report on the study.
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OK, not about sex, but about something much more important to your business...international real estate! NAR has compiled an extensive talking points/resource guide document on international real estate. Called "Everything You've Always Wanted to Know About International Real Estate But Were Afraid to Ask," this 30+ page guide is organized by topic, to easily locate information on a single topic (CIPS, global networks, advocacy, value proposition, and more), and pull just a page or two on that topic. Ideal for association and firm spokespersons and trainers who need to provide information and/or answer questions. Association presidents will find this ideal for helping to identify and implement an international-related initiative or theme for their presidency. And for AEs and International Local Councils--an indispensable resource for international member services. Download the current version (and check back periodically for updates). Link is available under the "International Essentials" box on the NAR International 'home page' at Realtor.org.
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The 2007 REALTORS® Conference & Expo promises to be an exciting one as NAR kicks off its 100th anniversary celebration in Las Vegas (Nov. 13-16). The international programming will be bigger and better than ever, with the international 2nd home pavilion doubling in size from its New Orleans' premier in 2006. Note that the meeting days have shifted to a weekday structure (rather than the usual Thursday to Monday). The website for registration is now open. View the preliminary meeting schedule and registration/hotel information. Non-U.S. attendees who need visas and letters of invitation to travel to the U.S. are encouraged to begin planning early!
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Report compiled by NAR International Operations, narglobe@realtors.org.
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Intl. Web Site of the Month
The Minneapolis Area Assoc. of REALTORS®' Member Resource Center includes an "international page" highligting resources for members interested in international real estate and also for members looking for a follow REALTOR® to assist with a specific international transaction. MAAR is an exhibitor at this week's International Local Council Forum in Washington, D.C., showcasing global trade missions.
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Upcoming Intl. Events
International education and networking opportunities in your own backyard! Check out these international expos & meetings sponsored by NAR and U.S. REALTOR® Associations:
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Featured CIPS Course
Explore Europe's western most capital while earning your CIPS designation. Sponsored by APEMIP (NAR's association alliance in Portugal), the full 5-course program will be taught in English in Lisbon, July 9 - 14. Download the registration form for this special opportunity.
Looking for training a little closer to home? Members can begin CIPS designation training with the International Real Estate for Local Markets in St. George, Utah, June 21-22. Call 435.674.0600 or e-mail jim@abrutah.com.
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NAR Global Partners:
Congratulations to Norges Eiendomsmeglerforbund (NEF), NAR's bilateral association partner in Norway, which recently celebrated its 75th anniversary! A small NAR delegation was there to congratulate NEF and wish them a prosperous coming 75 years!
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